Article: The H1B Visa Struggle: No Relief in Sight

The H1B Visa Struggle: No Relief in Sight

Over the past 18 months, the Trump administration has cracked the whip on H1B visa system. There is no relief in the vicinity.

The chaos and uncertainty regarding the extent of proposed changes for existing and new H1B visa holders in the USA have only intensified in the last few months. Despite employers rapidly changing according to new rules, there is a palpable sense of anxiety amidst the Indian diaspora in America. In this political battle, undoubtedly, the quintessential Indian employee who relocated, or wishes to relocate, to live the ‘American Dream’ is the worst hit of all; partly, due to the high exposure Indians had in the entire process in the first place. Let’s take a look at how things reached where they are today, and what can be expected in the future.

H1B Visas: A quick recap

For the uninitiated, the H1B visa is “a non-immigrant visa that allows US companies to employ foreign workers in specialty occupations needing theoretical or technical expertise”, as per WorkPermit. Up until 1990, there was no upper limit on the number of such visas issued and for the first time, a number of 65,000 visas was decided by the Congress. After witnessing a temporary rise from 1999-2003, the number was reverted back to 65,000 in 2004. Since then, up to 65,000 H1B visas are issued annually, in addition to 20,000 visas with the master’s cap. While minor changes in the process and overarching rules have taken place year after year, former President Obama gradually eased restrictions and also granted permission to spouses of H1B visa holders to gain formal employment in 2015. As a result, the number of Indian employees applying for a visa, and successfully obtaining one, increased progressively from 2010 to 2015. The numbers peaked in 2016, the last year when Obama held office. Things took a drastic turn when Trump, who had already established himself as an ‘America-First’ president, assumed The Oval.

Since 2016, a successive decline in the number of H1B visa applications from India has been recorded.

Changes under the Trump administration

During the election campaign, Trump had called out on foreign workers stealing American jobs and vowed to bring them back. After assuming office as well, he criticized the lottery process of granting H1B visas and specifically targeted Indian organizations for exploiting loopholes in the system. Hence, it came as no surprise that within months of being sworn in as the president, he set his eyes on reforming the H1B visa system. He signed the ‘Buy American, Hire American’ executive order in April last year, which directed crucial changes in the current process of obtaining H1B visas. In the last one year the following changes have taken place:

The process of applying for the visa, documentation required and employer verification have been made very stringent.

The minimum annual salary of $60,000 for an individual with H1B visa has been increased to $90,000, making it less financially attractive for companies to get foreign workers.

Executive orders issued by the president also seek to restrict the duration for which the visa is granted. Currently, visas are granted for three years and extended further. Visas with a shorter duration not only make the extension difficult, but also make it next to impossible to apply for Green Card (for permanent residency).

The administration has also declared that it is repealing the permissions allowing H-4 visa holders to gain legal employment in the country. H-4 visa holders are usually spouses of H1B visa holders, and over 90% of the same are Indian.

Entrepreneurs will no longer be able to apply for an extension to stay in USA to nurture their startup.

Directives issued by the United States Citizenship and Immigration Services (USCIS) have redefined what constitutes a ‘specialty occupation’, thus, forcing employers to reconsider H1B workers, especially from the Indian IT sector.

Employees entering USA on H1B visas will find it very difficult to move between projects and locations, for the employer has to prove before their arrival that they will be engaged in “specific and non-speculative qualifying assignments in a speciality occupation for the entire visa period.”

Companies applying for H1B visas would have to report to the Department of Labor about their efforts to recruit local workers and prove that hiring a foreign worker is a necessity.

Like last year, premium processing, wherein the applicant can fast-track the process by paying a fee, has been suspended.

The interview process has become excessively rigorous and detailed. Applicants are asked to furnish details of social media accounts, emails and telephone numbers used in the last five years.

The Impact

Naturally, these policies have ramped up the heat on Indian companies, especially the IT sector. A successive decline in the number of applications from India has been recorded since 2016, and several big companies like TCS, Infosys, and Cognizant (that were called out earlier for manipulating the lottery process by submitting a large number of applications) have seen double-digit dips in the percentage of visa applications as compared to last year. A study conducted by the San Francisco Chronicle showed that between 2015 and 2017, Wipro reduced visa filings by 52.4 percent, TCS by 18.3 percent, and Infosys by 38.1 percent. Even the total number of H1B applications received by the USA saw a slump. Under these circumstances, where employment is unstable, spouses are not allowed to work and deportation a very reality – USA is fast losing its sheen as a preferred choice for skilled workers. The American Immigration Council has echoed this sentiment in a recent report. Amidst the uncertainty on the new rules and processes, however, workers have been allowed a grace period of 60 days to look for a new job or make preparations to leave the country; earlier this was not the case.

Reports from National Foundation for American Policy say that while Amazon saw a year-on-year increase of 78 percent in the number of H1B visas obtained, Facebook witnessed a 53 per cent rise. Infosys, however, saw a dip of 49 percent and Mindtree of 54 percent

In addition to workers, companies are also struggling. According to Envoy Global, an immigration services provider, 26 percent of its surveyed employers have delayed projects, and 22 percent have relocated work overseas. Recently, a group of US outsourcing organizations filed a lawsuit, alleging that a February 2018 policy memo by USCIS is causing them harm and posing an ‘existential threat to their businesses’.

What does the future hold?

Latest data suggests that American corporations are being granted more H1B visas, whereas Indian companies have to face massive rejections. Reports from National Foundation for American Policy say that while Amazon saw a year-on-year increase of 78 percent in the number of H1B visas obtained, Facebook witnessed a 53 percent rise. Infosys, however, saw a dip of 49 percent and Mindtree of 54 percent. Some reports suggest that the rejection rate for some Indian companies is as high as 70 percent. Experts have argued that the number of foreign workers is too minuscule to influence the entire job market. Furthermore, they say, that there is no evidence to indicate that restricting the hiring of foreign workers results in an increased local hiring. However, companies are not leaving anything to chance and have already reduced their number of H1B applications, in addition to recruiting and developing local talent in the USA.

As far as the H1B visa process is concerned, one can expect its popularity to dip in the coming years, especially for Indian workers. Rejection rates might soar higher, and even those who obtain visas might be subject to random verifications. Until there is clarity on how the US government intends to formalize the said changes, the average Indian employee there can only speculate the impact it might have on him/her. However, the process is not going to be simplified anytime soon, that is certain. Companies will increasingly try to procure local talent as they will have to justify each foreign worker they employ. The increase in minimum wage will naturally squeeze company margins. Individuals trying to get in will have the odds stacked against them, and those already in the US could be forced to comply with difficult rules and conditions. Unfortunately, the future doesn’t look good.